Japanese stainless steel scrap market overview 2013Autumn

                                         IRUNIV 2013/11/14

 It’s the 2013 Fall Season of situation when all metal scraps are having stringency on a structural outbreak decrease, and the price is rising into more than the standard price, while primary wholesaler and maker are also absorbed in the high price, but if it’s limited to NI-based type 304 stainless steel scrap, the absorbed one is the wholesaler in the city only, while the maker is in no rush surprisingly, and among them, there is also a maker that provided strict frame limit to the primary wholesaler.

 Export is also poor compared to some time ago. Nickel price is also gradually falling by heaviness of the stock, and the slightly weak aspect offers a glimpse, “The scrap has begun to drift considerably” (Professional wholesale dealer of Kansai area said). Because it is said that it’s begun to drift also to JSP Osaka, there is possibility that signal telling the falling down is near may be given off.

 The current type 304 stainless steel scrap market price is 130?135 + @ yen per kilometer with city distribution base, and in one part, it’s near to 150 yen. Type 304 is cheaper than a canned aluminum scrap with in-the-city base.

*Market Price Transition of Type 304 and Aluminum UBC

Transition in Price and Stock of LME Nickel

 As can be seen on the above graph, the market price of LME Nickel that exceeded 14,500 dollar per tonne on around October 20th, is decreasing by 800 dollar to 13,700 dollar per tonne. By the words that stated “Stainless steel mill (scrap) may move to decrease if the stainless steel mill itself falls below 13,500 dollar” (Distribution Trading Company source), after seeing the fall of this nickel market price, there will be a seasonal relationship and distribution that is begun to move.

 However, the domestic stainless steel production, the demand is actually not so bad. Bolt related steel as construction material, in order to chase the ordinary steel that is raised in advance, firstly moves, production of special steel makers increase, plate-based is continuing and chrome-based is firm, and nickel-based “Starts to move from the end of October together with the increase of Nickel market price” (Stainless Steel distribution wholesaler said) for both partly the thick board, and the vital sheet.

Originally, the nickel-based sheet may be called an item moving in the second half of the year, but the demand increase before tax increase (car, house), reconstruction demand, demand for Olympics, and environment are not bad compared to one year ago. Thus, the production of plate-based maker, except for Nikkinko, NSSC (Nippon Steel & Sumikin Stainless Steel Corporation), is firm. Nisshin Steel is exceeding 50 thousand tonne on July〜September, except for the schedule maintenance month. Nippon Yakin that is in stock price rise condition by the aftermath of indirect Olympic special demand, was 24,000 tonne in September, but raised to 28,000 tonne in October, 29,500 tonne in November, and it’s 26,000 tonne in December, but plus 4000 tonne compared to what’s planned on the beginning until next March. It is said that the last-minute demand before tax increase has given its effect.

 However, it seems that the production of the largest company NSSC in December falls to nearly 30,000 tonne. From what’s heard, “Next May the schedule of furnace repair will be advanced and production will be reduced”, for this is too much and a reason of production reduction that almost isn’t heard. There might be some other cause. But, it’s considered that the reduction in production on December is related to the frame limitation.

NPI Or Scrap?
 There is also a tendency to guess whether if Japan would use NPI (Nickel Pig Iron), too, which is already spreading in China and India. Because there is problem with P (Phosphorus) and S (Sulfur) in NPI, it’s hard to use, and there is an established opinion from Japan towards NPI until now stated that it’s alright for Chinese “Non-standard goods” of 200-based stainless steel, but it can’t be used on Japanese high class stainless steel.

 However, China can reduce costs by having significantly boosts the use ratio of NPI, and it has a track record of profit increase that can’t be overlooked. It’s the NPI that now gives off a main presence from the eye of typhoon, such as holding 500 thousand tonne from 1.8 million tonne in the world Nickel market (both Nickel pure content-based).

 There is possibility of making NPI in Korea, too. By making NPI, certainly the scrap usage ratio will decrease. 10 years ago, China was using 50% scrap bought from outside, but now, in reality, that ratio is decreasing until 11%. The priority of raw material is NPI, and next is scrap. Scrap is calculated with 75?80% of ordinary nickel price ratio, but by becoming the NPI mainstream, that proportional constant is predicted to decrease.

 It is considered that it won’t change as drastically as China, but large makers is trying the sample try at any time. For the P, S, problem, a specialist source said that if the product quality was good enough, then it would be suppressed. The current NPI price, roughly, is 990?1000 dollar for Ni 1%. NPI currently is rich by variety of Ni content from 1% to 10%. Continuing China, Indonesia has also the direction to cut the rudder by NPI production.

Giving 120% of Import Tariff to Korean Stainless Steel
 Well, finally, after the domestic stainless steel market was getting excited, I want to allude about the possibility of Korea having their stainless steel products strike into the Japan market with low price similar to AD. Korea is reporting accounts in December. Last December, POSCO tossed also its stainless steel products into Japan with extraordinary price.

 Because of that, of course, Japan domestic stainless products market fell down, and lost its chance to do a proper price rise. Even Taiwan sets AD tariff for Korea and China stainless steel, and prevents the low price products influx. It is for protecting the stainless steel industry as a country. If Korea can’t export to Taiwan, then it’s predicted that with a high rate, the possibility of Korea giving Japan an unnecessary Christmas present this year, and export low price products to Japan is high. If that’s so, then I, personally, think that Japan should set also a 120% Import Tariff to Korea stainless steel.
(IRuniverse Susan)

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